The ERA Foundation welcomed Phil Smith, former CEO and Chair of Cisco, former Chair of Innovate UK and currently Chair of IQE PLC, the global leader in the design and manufacture of advanced semiconductor epiwafer products driving connected 5G technologies, to give our annual lecture in May 2022.
Phil’s lecture ‘Digital Thinking – The Key To A Productive Nation’ is underscored by his reputation as a distinguished thinker and speaker on the transformational nature of our connected world, sustainability, ambition, inclusion & diversity and the critical need for STEM skills in our future generations.
As we move forward towards 2023, we have put together a shorter summary of the lecture which explores the increasingly competitive environment of the expanding global digital economy.
Improving the UK’s productivity is critical for our global competitiveness, our wealth creation and our standard of living. Yet we languish some 15% or so behind our international competitors. Increasingly digital technology has a part to play in improving productivity but harnessing its benefits in our social and business operating models is not as straightforward as might be assumed.
From a productivity perspective, we find our position hard to rationalise. Surely the UK is highly innovative and productive and yet all of the statistics tend to show otherwise. There is a widespread perception issue with the majority of companies believing they are as productive or more productive than their peers and the reality is that less than half are. However, if we can crack the productivity nut by moving everyone up a few percentage points, then there is at least £162BN per year of improvement in GDP available to us as a nation. Worth striving for.
From a technology and digital perspective, we know that SMEs who adopt 2-3 key technologies are around 25% more productive but yet many struggles to move beyond the very basic levels of technology adoption.
We have congratulated ourselves for many years on our sophisticated use of e-commerce in the UK but that is probably more attributable to a highly deregulated financial system than widespread exploitation of technology. In fact, on productivity-based technologies such as CRM and ERP we find ourselves way down the league in our adoption and use around 28th in Europe alone.
The reasons for the lack of use of technology by SMEs, in particular, are complex but include a critical lack of skills, an inability to motivate and mobile workforces as we as a lack of confidence in technologies which on the whole are built for big organisations and not small ones.
Digital skills are already critical but will continue to be more vital in the future with 90% of roles requiring digital skills within 20 years. On the other hand, we have to be thoughtful about the way we use and deploy the technology. Most technologies that people would recognise as digital today revolve around social networking and the attention economy in which trillion dollar companies are competing for our attention to subsidise their business models.
The key to success and a great place to start is improving the digital skills and digital confidence of the nation. There are many initiatives in place to provide this sort of capability but it is a complex, confusing and fragmented landscape. But given that 80% of the workforce of 2030 are already in the workforce, one that we have to improve.